Lynne Maxeiner – Director of Investor Relations David N. Farr – Chairman, Chief Executive Officer and President Walter J. Galvin – Chief Financial Officer

Scott Davis – Morgan Stanley Nigel Coe – Deutsche Bank Deane Dray – FBR Capital Markets & Co. Robert Cornell – Barclays Capital Jeff Sprague – Citi Investment Research Gautam Khanna – Cowan & Company Michael Schneider – Robert W. Baird Eli Lustgarten - Longbow Securities Stephen Tusa, Jr. – JP Morgan

Welcome to the Emerson third quarter fiscal 2009 results conference call. (Operator Instructions) Emerson's commentary and responses to your questions may contain forward-looking statements, including the company's outlook for the remainder of the year. Information on factors that could cause actual results to vary materially from those discussed today is available in Emerson's most recent annual report on Form 10-K as filed with the SEC. In this call, Emerson's management will discuss some non-GAAP measures in talking about the company's performance and the reconciliation of those measures to the most comparable GAAP measures is contained within a presentation that is posted in the Investor Relations area of Emerson's Web site at www.emerson.com. I would now like to turn the call over to Ms. Lynne Maxeiner.

I am joined today by David Farr Chairman, Chief Executive Officer and President of Emerson, and Walter Galvin Senior Executive Vice President and Chief Financial Officer. Today's call will summarize Emerson's third quarter 2009 results. A conference call slide presentation will accompany my comments and is available in the Investor Relations section of Emerson's corporate Web site. A replay of this conference call and slide presentation will be available on the Web site after the call for the next three months. I will start with the highlights of the quarter, as shown on page two of the conference call slide presentation. Third quarter sales were down 22% to $5.1 billion an underlying sales decline 19%. Sales in the third quarter were flat sequentially with second quarter. Our operating cash flow was $916 million and free cash flow was $800 million. Our free cash flow to net earnings conversion was 206% in this quarter. Operating profit margin of 14.7% was up 60 basis points sequentially from second quarter on flat sales. Pre-tax earnings margin was 10.7% adversely impacted by restructuring expense of $83 million in the quarter. We have been aggressively restructuring and expect $280 million to $300 million in restructuring expense in FY '09. There was a negative $0.05 impact on the third quarter year-over-year earnings per share comparison due to the increase in restructuring. Earnings per share was $0.51 for the third quarter. Our balance sheet remains strong and we've aggressive reduced inventory. Our operational inventory was reduced over $275 million since second quarter '09. This will strongly position us when the cycle turns positive. Slide three the P&L. Again, sales down 22% to $5.091 billion, underlying sales down 19%, currency subtracted four points and acquisitions added one point. Operating profit in the quarter of $749 million or 14.7% percent of sales, with deleverage on lower sales volume, unfavorable product mix and aggressive inventory reductions as main drivers of the decline. We did see a sequential margin improvement of 60 basis points on flat sales versus the second quarter. Net earnings of $387 million in the quarter, diluted average shares in the quarter of $754.7 million, no shares were repurchased in third quarter '09, which gets you to the EPS of $0.51. Slide four underlying sales by geography. In the U.S. sales declined 23% total international was down 19% driven by a weak Europe that was down 25%, Latin American down 15% and Middle East-African down 13%. Asia was down 5% which includes China, which was down 2% in the quarter. The total underlying sales were down 19%, currency subtracted four points and acquisitions added one point, which gets you to our consolidated sales of down 22%. Given that emerging markets continue to outperform the mature markets, they could represent 32% to 33% of Emerson's fiscal year '09 sales and they will recover faster versus the U.S. and Europe. Next slide, more income statement detail, gross profit of $1.838 billion or 36.1% of sales, the decline driven by volume deleverage, unfavorable mix and our lowered production levels that drove our inventory reductions, which was partially offset by cost reductions, SG&A of 21.4% getting you to an operating profit of $749 million or 14.7% of sales. Other deductions of $141 million, which includes a $59 million increase in restructuring, interest expense of $64 million getting you to the pre-tax earnings of $544 million or 10.7% of sales. Taxes of $157 million in the quarter include a net operating loss benefit and an additional credit from the repatriation of non-U.S. earnings. The effective tax rate in the quarter was 28.6%, and the full year tax rate is expected to be approximately 30%. Next slide, the cash flow and balance sheet, operating cash flow up 11% in the quarter to $916 million, CapEx was down 25% to $116 million getting you to our strong free cash flow of $800 million, up 19%. Our free cash flow conversion was 206% in Q3 and 110% for the first nine months of our fiscal year. We reduced our inventory balance $200 million sequentially from March 31, 2009 and more than $400 million from December 31, 2008. Sequentially since the second quarter, we reduced operational inventory $275 million. Currency and acquisitions added back $75 million, getting you to the net inventory change of approximately $200 million. Slide seven the business segment P&L. Business segment EBIT of $637 million or 12.1% of sales, the decline driven by volume deleverage, negative mix and increased restructuring. We did see a sequential improvement in EBIT margin of 90 basis points on flat sales versus second quarter. Difference in account methods of $48 million, corporate and other of $77 million, an improvement of $44 million driven by lower incentive comp, $12 million lower commodity mark-to-market losses of $10 million, and a one-time gain of $6 million. Interest expense of $64 million up $18 million. As we communicated, we did issue long-term debt in January and April, which gets you to the pre-tax earnings of $544 million. On Slide eight we'll go through the individual business segments. First, process management. Sales in the quarter down 13% to $1.505 billion, underlying sales were down 9%, currency subtracted seven points and acquisitions added three points. By region, the U.S. was down 18%, Asia was up 3%, Europe down 3% and Middle East-Africa down 5%. The end markets for process management remain mixed but we believe the long-term demand for energy will drive capacity expansions and facility upgrades. EBIT margin dollars of $222 million or 14.8% of sales, the decline driven by deleverage on lower sales volume and unfavorable product mix, with a measurement in flow product declines greater than system declines due to the backlog. We also had higher restructuring of $14 million in the quarter. All of our business segments have been aggressively working to reduce inventory and at process management, we reduced inventory by approximately $50 million over the last 12 months and about $70 million since the end of March. We believe certain industry segments such as power will continue to provide areas for growth during this downturn. Next slide industrial automation. Sales in the quarter of $813 million down 36%, underlying sales were down 34%, currency subtracted five points and acquisitions added three points. By geography, the U.S. was down 36%, Europe was down 37% and Asia was down 19%. EBIT dollars of $41 million or 5% of sales heavily impacted by volume deleverage. Industrial automation also aggressive reduced inventory by approximately $150 million from third quarter '08 impacting margins negatively. There was also higher restructuring expense of $8 million in the quarter. We have seen significant order declines in the power generating alternator business. The G7 gross fixed investment is expected to remain negative through the first half of fiscal 2010. Slide ten, network power. Sales in the quarter of $1.306 billion down 22%, underlying sales were down 15% currency subtracted four points and acquisition subtracted three points. By region the U.S. was down 23%. Asia was flat and Europe was down 30%. We saw broad declines across the uninterruptible power supply precision cooling and embedded power business. EBIT dollars of $135 million or 10.3% of sales negatively impacted by volume deleverage and negative acquisition impact, which was partially offset by cost reduction. And a decrease in inventory of approximately $120 million from third quarter 08 also increased restructuring of $24 million. Excluding restructuring, EBIT margins were 12.7%. We also saw sequential margin improvement of 210 basis points from second quarter '09. We have seen stability in the three-month trailing underline order trends for the last six months. We have been aggressively restructuring the business to continue to reposition the cost base. Next slide Climate Technologies. Sales in the quarter of $859 million down 21% with underlying sales down 20% currency subtracting three points and acquisitions adding two points. By geography the U.S. was down 16%, Europe was down 30% and Asia was down 23%. As you already know, summer weather patterns across the U.S. have been cooler in 2009 compared to last year. We have seen some stability at Climate Technologies with year-over-year underlying volume decline at similar levels in Q 2 and Q 3. EBIT of $131 million or 15.2% of sales we have seen a sequential margin improvement of 620 basis points from the second quarter. Cost reduction efforts in the quarter were offset by volume deleverage and restructuring. We believe the HPAC stimulus programs recently enacted in China should provide future benefits. In the third quarter we completed the Vilter Manufacturing acquisition, which expands our refrigeration business to include industrial refrigeration. This is a great adjacent market for climate technology so we're excited about this acquisition. Next Slide, appliance and tools. Sales in the quarter of $771 million down 23% underlying sales was down 22% and currency subtracted one point. By region the U.S. was down 21%, Europe was down 33%, and Asia was up 1%. Our consumer related businesses continue to show signs of stabilization, EBIT margin of $108 million or 14% of sales. We saw 560 basis points margin improvement sequentially from second quarter '09. In the third quarter cost reductions price and material cost containment were substantially offset by volume deleverage. We also had a benefit from $9 million charge that was recorded in the same quarter prior year. We continue to focus on cost and asset that management create value in appliance and tools. So with that I will turn it over Mr. David Farr. David N. Farr: Needless to say, Emerson is still facing very difficult and challenging times around the world, and first of all I want to thank all the management team and the global operating people around the world as they take the very difficult actions to strengthen the global business in this difficult time period both from an economic standpoint and a current tough political environment. We are, as I look at it now, in the depths of this economic downturn and you will see on the next page when we go to it, you will see that we have laid out what I look at the next three quarters from the standpoint of our underlying economic forecast and what we look at as our underlying economic sales growth for the company. If you'll at today the down 19% in this quarter and I think we'll be down somewhere in the 18% and not 20% in the next quarter. We are taking a lot of actions to strengthen this company both from a P&L standpoint from a global restructuring best costs, we're cleansing the balance sheet both from a working capital and from a fixed asset, we're generating high levels of free cash flow, and we continue to make the critical technology investments, which will be very important to us as we come out of this downturn and start recovering in late 2010, which is consistent with what I've said in the past. Right now the operating profit margins are being impacted at each of the divisions by significant production level reductions as we drive our production significantly below our sales levels. We will continue to do this until we see underlying recovery from our customers. I would expect this to continue to reduce our inventory levels until December or January in the coming months, sometime December 2009 or January 2010. As we look at the economic bottoming right now and it is forming its pretty clear it's forming but I do not see much a recovery here in the very near future. Our order rates are clearly re-stabilizing, our early cycle businesses, as you saw in the quarter, have slowed down their rate of decline. They're starting to get the impact of the restructuring, they've got the inventory reductions behind them and so we're now seeing the benefit of that in the P&L. Where the later cycle business is the process and industrial automation and some of the network power are in the early stages of significant reductions relative to their inventory and the overhead, but when we finish this year we will leave 2009 in a very good cost position both from a P&L standpoint and also from a capital structure standpoint as we generate the free cash flow this year and going into 2010. The view that I see today is we're going to be looking at our underlying economic forecast this quarter of around 14%, next quarter of around 14%, and then the second quarter of fiscal year 2010 around 10%. This is going to drive our underlying sales growth around 18% to 20% negative in the fourth quarter, in the first quarter a very difficult quarter for us 18% to 20%. And then I start seeing a slowdown of those negatives as we go into the second fiscal quarter which ends as you know March 2010 in that 10% to 13% range. So as we position the company today, from a cost structure standpoint an overhead structure standpoint and a personnel standpoint, we are getting ready for a continuation of a very difficult volume environment, production environment. So as we look at the full year numbers we're talking our sales declining somewhere between 12% to 13%, which gives us approximately our sales revenue around $21 billion down 15% to 16% versus prior year. Our restructuring is going to be somewhere around the $280 million and $300 million level depending on what we can get done here in the next two months as we're running out of time relative to this fiscal year. We will not slowdown restructuring in the first quarter of next fiscal year we will continue to get the job done. We're not going to stop just because it's the end of fiscal quarter because, as I said, we are looking at some very difficult time periods ahead in the next couple quarters. We now expect earnings per share to be in the 220 to 230 range. As you know, this has been extremely tough year relative to trying to forecast the top line and also from the standpoint of trying to forecast the earnings per share line as we ramped our restructuring and as we've taken out significant levels of inventory. Our inventory has gone from a peak of around $2.5, 2.6 billion down to a little bit under $2 billion now, excluding acquisitions, and we will continue to reduce that inventory below $1.8 billion before we're all said and down in this cycle. From an operating cash flow standpoint, the operations are getting the job done both from a working capital side and also from a capital spending side, and I would expect our free cash flow to be in the $2.4 billion to $2.6 billion range very good performance on very challenging economic time period. So as we look at it and you think about where we are today – and you want to go to the next Chart, Lynn, if you have the numbers there the economic numbers, why don't you flip the last chart. Can you flip to that chart there? I'm looking at two, three more challenging quarters the bottom is forming it's been forming now for the last two or three months and we're ready for it. We viewed it with the board today and we believe we have our cost structure in line. We will see sequential improvement in margin again like we saw this quarter. We have seasonable patterns of those things. We believe our volume will continue to be below prior year and into the second half of 2010 on a fiscal year basis, so tough times. We're still generating very good levels of profitability. We will generate a profit margin somewhere between 15% and 15.4% with our sales down underlying 12% to 13%, and a reduction of $500 million of inventory. So, despite the challenging environment, we have continued to generate high levels of profitability, and we will generate somewhere around $1.7 billion of net earnings. Yes, this is down from last year's record level but still we will generate a lot of net earnings with a lot of restructuring and a lot of actions being taken in the company, and we will generate close to last year's free cash flow. So not bad performance in a very difficult environment, and I'm proud of the people around the world dealing with this because we have situations right now where our customers have basically shutdown and reducing inventories and we are having to deal with that from our own production standpoint, at the same time we're having to our [inaudible] own inventories. So we are where we are, nothing to apologize about. Challenging year, it is starting to form a bottom. We will recover as we go into 2010 and we will have positive growth by the time we finish 2010. And that's where we sit. And so with that I'd like to open the floor and have questions, but again I want to thank everybody out there around the world at Emerson for what they've done and I want to thank the support of our customers as they've worked with us in these very difficult times. Thank you.

(Operator Instructions) Our first question comes from Scott Davis – Morgan Stanley. Scott Davis – Morgan Stanley: Want to talk a little bit about China, and correct me if I'm wrong, but I think this is your first quarter of the down cycle where China was a negative territory, and what I'm asking I guess is a couple of things. One if there's some timing issues that drove that number negative, because certainly we've seen China PMI picking up. And then second there in the slides you mentioned that the China HPAC stimulus program if you can walk through, what that means, what the timing of it is, and how much of an impact you would expect to see in your China business going forward. David N. Farr: From my perspective Scott, I think it's a timing issue. We've had as you know, you're right this is the first negative growth we've had in China in quite some time. I would expect us to actually see our forth quarter to be negative again from the standpoint we're coming up against some very, very difficult comps relative to our process business. We've held up well all year long. I would expect us to be positive for the year, but I would expect us to see this quarter and probably the first quarter of 2010 also to be negative. The process guys right now the process businesses is a key driver in this space relative to what's going on there. We are starting to see HPAC be less negative, it's still negative but we're starting to see less negative there. And what's going on right now the government is encouraging people to go with more energy efficient products and they're making the transition and they're making an investment, so. I think China is going to be a struggle for the next three, six months for us, and then we'll start seeing a little bit more positive from the benefit of what's going on but it's not going to be a real hard negative for us. I think it's going to be slightly negative, negative 2% negative 5% range for the next couple of quarters. Scott Davis – Morgan Stanley: As a follow up, if we could talk a little bit about your restructuring efforts, it's been fairly large levels of restructuring and could you help us understand, when you're going to spend $280 million to $300 million. I mean how much of this is on headcount reduction and severance type issues versus how much of it is reduction and actual physical plant and asset levels or even goodwill write-downs. David N. Farr: There's no goodwill write-down in that number we would tell you that. That would be an impairment charge. We don't try to hide numbers, unlike maybe somebody else. What you're seeing here is currently our headcount peaked at 141,000 people at the end of our last fiscal year. We have currently reduced our overall headcount more than 20,000 worldwide not including 6,000 temporaries around the world. We would expect that to continue to go down probably somewhere another 5,000 or 6,000 level people here in the several quarters as we go after some very significant what I'd call long-term high cost structural facilities that we will be permanently closing. We have a lot of restructuring from the standpoint of both headcount, but also taking old non-productive facilities offline going after facilities where we no longer need that capacity and we want to move into the best cost locations. We have a lot of that going on here in North America, a lot of that going on in Western Europe, even Mexico, even in some parts of Asia. So we have a lot going on. Most of our restructuring if you look at it, is fundamentally relative to fixed assets as we shutdown a facility and severance costs of eliminating the people and the personnel relative to taking down 25,000, 30,000 people as we're taking on across this company around the world. There is nothing funny in there. I mean when you go through and shut a facility down you may have a little bit $1 million, $2 million type of dollars here and there relative to some bad asses, but fundamentally we're cleaning out facilities that we no longer need, and when the economy does come back that manufacturing will be produced, or that production will be in best cost locations. Scott Davis – Morgan Stanley: I would see a quick payback on this type of stuff, right? David N. Farr: I think some of it will be quick some of it will not be quick, as you look into some of the Western European the paybacks are typically more like 2.5, 3 years paybacks and we have a lot of Western European restructuring going underway right now. When it's all said and done and we lay out the fiscal year for everybody in the November timeframe you'll be able to see and we'll show you exactly where it's all said and done and where things have been announced and discussed and disclosed employees involved in this.

Our next question comes from Nigel Coe – Deutsche Bank Nigel Coe – Deutsche Bank: I guess it's no co incidence that the businesses may be most aggressive under [construction] where ones were the margin trends were much better this quarter, particularly within two climbed but never powered. Following the [slide] from here, Dave, do margins stabilize or do the margins actually still go up on a Q-on-Q basis? David N. Farr: I think you're going to see, this business is becoming less negative as we go forward here and eventually will go positive as we move into some parts, in the early parts of 2010 from a cycle standpoint. Early cycle businesses will start going positive. We would anticipate margins to continue to improve as this business goes forward based on the volume levels you see on a quarter-to-quarter basis in the seasonal patterns, but they've reached bottom. They have taken the inventory action and a reduction in restructuring actions earlier on versus a later cycle businesses so we'll start seeing the early cycle businesses, starting to see them part perimeter margins next quarter and then as you move into the first half of 2010. So I think we feel very good about those right now from the standpoint of when you see the restructuring by business and the inventory reduction by business, we've got that action taken care of right now. Nigel Coe – Deutsche Bank: Then how important was the [inaudible] gap in tools and climate this quarter and how do you see that gap trending over the next three quarters. David N. Farr: From a standpoint of tools and appliance components the price cost relationship was not that important. Right now we still have it in check. We have it pretty under control. We have not seen any outrageous inflation standpoint relative to the price cost in the appliance and tools area. We have had a situation where a timing issue relative to pricing actions and relative to material actions in the climate technology where we had the pricing kick in and now the price costs are back in line so that's helped us here in the second half. But right now our overall price costs for the year is in good shape. We'll be slightly positive. I'm looking probably for the overall corporation to be slightly under 1% price increase and our net material inflation in check from that perspective so we're in pretty good shape there. And we go into next year I think we would expect right now in the first half of the year, less price, as inflation I believe inflation will start coming in. You will have to have some inflation and some pricing pressure as you move forward toward the end of 2010, early 2011. Nigel Coe – Deutsche Bank: You mentioned, David, in one key in 2010 [construction] will be quite high you could be spending between 18 and 100 every year, year end and year out, do you want to give us a placeholder for 2010? David N. Farr: What I may come at the first quarter because I think what's going to happen to us, Walter and I have been through this enough that we know that even though we're saying $280 million to $300 million it's hard to get everything done. So I would expect the level in this quarter, if it's going to be in that $100 million, it's going to stay up at a fairly high level, probably in the $50 million to $75 million in that first quarter and I think we're going to see overall restructuring next year. I'm going to give you a very broad place order right now, somewhere between $125 and $175, Walter, that's about right? Walter J. Galvin: Yes. David N. Farr: That's where our place order is right now. We'll get a better fix on that as we look at where we close out this year. The other thing is we've seen our modeling and I've held back in giving what I'd say was more tighter guidance relative to our sales and earnings in the last couple of months, but I've seen our forecast of economics and our sales forecast have pretty tightened into this band right now. So I mean, I think our restructuring will come down because we're getting it all done, but it's still going to be pretty high levels in the first part of next year. Nigel Coe - Deutsche Bank: Great and then just one final one, you mentioned power-gen will stay strong, just to clarify do you think that stays strong through 2010 when the rest of the business is under pressure or do you think Power-gen stays pretty good for the next two or four years? David N. Farr: Well we're talking about primary power, when you say power-gen I'm thinking of [Genesis]. What we are talking about is our power industry and the process side. Right now, the investment both from around the world, there's some new investments going out but also the upgrades in investments. So I'm looking at both 2010 and 2011 to be pretty good businesses for our power business, not the power-gen set business, but the power business relative of our process area, which is control system, automation, the control valves and instrumentation like that. We've seen a very good demand and that has not slacked off and I think that will keep on going for at least 18 months.

Our next question comes from Deane Dray – FBR Capital Markets & Co. Deane Dray - FBR Capital Markets & Company: Dave, I'd be interested in hearing because you mentioned in an answer to Nigel's question about the seasonal patterns. Can you talk about the seasonal patterns in climate technology and especially it's been core then typical and what have you done with inventory there? David N. Farr: Inventories at levels this industry hasn't seen in a long time. As I look at it, at the channel, at our customer level and our level, our inventories are in very, very good shape. They're very low. I want to say the climate technology people both on our end and also people at our customer level have done a good job of keeping the volumes down. And there has been no build here because we've reacted very quickly. We're talking days when we change things. The one thing that I see happening right now, as you know, we're getting ready for a transition relative to the refrigerant in U.S. and on December 31 of 2009, the refrigerants are going to change. It's going to go from R22 to 410A. There is discussions right now up in the channel, nothing has been finalized but I would expect that we would see some build as we finish this year, this calendar year, not a fiscal year, but the calendar year, which is our first fiscal quarter, getting prepared for that transition. I would expect that to happen. We have no indication at that point in time that would be good news because from the standpoint of inventories are low and our factory inventories are extremely low. And hopefully our customers will plan this carefully and not drop it on us in one day's notice because we were down low from a standpoint of manpower and inventories. But I think that will be one positive we'll see as we close out this calendar year. Deane Dray - FBR Capital Markets & Company: While we're still in the HPAC world, your comments and acquisitions on Vilter Industrial Refrigeration, what's the opportunity for Emerson? David N. Farr: Well, as we look at that market space from a horsepower standpoint, it's a screw compressor technology and we could not take scroll off that high. We could only go up to a certain levels and this, 150 of horsepower, this allows us to go up to 200, 300, 400 horsepower. This also allows us to go after the natural gas industry through our process business using the screw technology from the standpoint of getting into that market channel and it helps us globalize this business, which is very much a U.S. business today. So it really allows us to get into a bigger market segment from a refrigeration standpoint and then also from some of the natural gas marketplace, which fits very nicely with our natural gas business relative to our process business. It's a nice little strategic fit. If we continue to move in this space, there are opportunities out there around the world to do more.

Our next question comes from Robert Cornell – Barclays Capital. Robert Cornell - Barclays Capital: Surprised no one's asked about process control yet. David N. Farr: They don't want to ask me. Robert Cornell - Barclays Capital: But I do. So process, I mean, what's the top line look like and more importantly what would – first of all give us the top line expectation and then the margin in process for 2010 please. David N. Farr: I said and I think you can go back and look at the transcript, I've been saying that I think process will be down underlying sales year 12% to 14%. I believe process will be down 12% to 14%. They are trending, the order pattern's trending that way. What you're seeing, and I'll come to margins in a second, what you're see going on right now is Steve Sonnenberg who is the business leader and John Barron who's now run the systems business but also helping Steve quite a bit is that they are attacking their infrastructure of this company which has been growing quite rapidly for the last five years. And they're repositioning things so they're taking inventory levels down they're going after restructuring from a cost standpoint. And so we went from the first half this year growing very nicely to now all of a sudden shrinking. And they are doing about face and starting to run 100 miles the other way and so there's a lot of what I would say, a lot of things going on inside this business to quickly attack the cost structure knowing that they're going to be down somewhere between 12% and 14% next year. I'm still of the opinion, these guys in the next six months will get their cost structure together. They are under enormous pressure right now from Walter, I and Ed Monser to get restructuring things done, getting ready for the tough times in 2010. I still believe, as I said last time, they will lose somewhere between 200 and 300 basis points as they go into 2010 from a margin standpoint and I still believe that. I said that last time. I still believe that will be the case. These guys are getting their act together, their cost structures in good shape and we have a lot of technology going the right way for us. So as of right now, the stake in the ground is 12 to 14 down sales, margins down somewhere between 200 and 300 basis points next year. Robert Cornell - Barclays Capital: Is that margins after restructuring or is that margins before restructuring? David N. Farr: As I look at it right now, I think it'll probably include both of them. It'll probably include it. They're going to get a lot of restructuring done this quarter and the first quarter and next quarter. Robert Cornell - Barclays Capital: Then here's the key question, I think. You're looking at, here the restructuring decline you didn't give us a cost out target for 2010, [as restructuring] for the whole company. And then the companion question is the overall impact on the year of the inventory takeout is around one point for the year. But why don't you walk us down as we model 2010 right, you gave us restructuring cost. You just said you're not going to tell, why not? What's the cost takeout? David N. Farr: I don't go out, I mean we have from our perspective there will be a significant cost reduction when business returns to normal. I'm telling you right now, my underlying sales will be down again next year. They're not going to be down 12% to 13% but they're going to be down again at a significant level, maybe half that level, but they're going to be down. And as I look at where we are from an inventory standpoint, the first say three or four months, I think we'll continue to take inventory out but not at the same level. I'm also looking at my largest business is going to have a down year with profit margins being down. We are going to be looking at our margins down again next year unfortunately. At this point in time, I have no magic wand or magic whatever to stop that at this point. But our goal as we go into our planning process, we're going to have some businesses coming up, we're going to have some businesses going down and we'll have some businesses probably being not much change. But the fundamentals are we will have down margins next year, Bob, I can't stop it. Robert Cornell - Barclays Capital: When you think about margins, are you thinking about your operating profit margin on a cost of good, SG&A margin for OIOD? David N. Farr: Yes, I'm thinking about my operating margin. I will have less restructuring, so obviously that will help me down there. But I'm also thinking about operating profit margin. I will have a down operating profit margin next year. And so as I look at it right now, I mean, most people including myself, I'm expecting our earnings to be down again next year. The challenge that we will face is it's going to be a year of two halves. It's pretty clear to me as I look at the underlying structure, what's going on in the recovery, sometime in that March, April timeframe we're going to start turning and the wind's going to shift to our backs. And the question will be that how fast is does that wind blow? But I think it's going to be a negative thing for us. And the other issue we have next year is our long-term, we put long-term a full year compensation plan in place and next year we have an overlap year. I mean, another thing going against us but those things happen, every three years that happens. So I mean I'm looking at it right now. I think we're well positioned and we will have down sales, we'll have a down earnings and we'll have a down EPS growth or situation next year. But I feel right now we're going to do a pretty job of minimizing that impact as we go into 2010 given everything we're doing right now.

Our next question comes from Jeff Sprague – Citi Investment Research. Jeff Sprague - Citi Investment Research: Just a little more on process, if we could. There was a little discussion in the press release about mix, obviously, with maybe instruments weaker than systems. I wonder if that also is kind of an MRO versus new install dynamic also if you can flush that out a little bit. David N. Farr: It is. There are three things. The first thing is our North America business our U.S. business is a very profitable business and our European instrumentation business is a very profitable business, and both of those businesses were down significantly in the quarter. We've been hit pretty hard here, which has been part of that is the MRO business. And so MRO has not seen the recovery yet. I still expect it will recover, in the cycle it typically will start recovering, but it hasn't recovered yet, so we're getting hit hard both here and in Europe from the economic standpoint in the MRO standpoint of bad mix. And then our emerging market business, which continues to do pretty well, obviously from some of it growing some of it shrinking less, so our emerging market business is going up. And right now as a percent of total sales this year, as we said in the release, I think our emerging market sales are going to be somewhere representing 32%, 33% of our total sales up from last year's 30%. So we do have a mix working against us. That will stabilize and as we get to a point where MRO starts kicking in here in North America, which I believe it will it always has in the past, then you'll start seeing the margins stabilize in North America. And some of the order patterns we're seeing in process right now, the last couple of months, would say it is starting to stabilize in that marketplace in North America, which is a good sign for us. Jeff Sprague – Citi Investment Research: Just to explore that a little bit more because I think, obviously, there's been some skepticism about your margin target that's down 200 to 300, but I think one of the things underpinning is or was your belief that MRO would be pretty solid in 2010. But as we look at these pressures on utilization rates across these end markets, I mean you did just in fact say that you see some firming, but is there some risk there that that's a little bit softer than you thought? What kind of visibility do you really have there? David N. Farr: Clear the risk for us relative to the 200 to 300 is what you did just exactly there, is the stabilization and the slight improvement in the key U.S. marketplace for 2010. The visibility is pretty good. As we go out of this year, if the underlying trend lines that we're seeing right now in the process in the U.S. continues to go the way it's going, I'm going to feel better about it as we go into, as we close out this fiscal year. If it stalls and starts slipping back down, then we will have a problem relative to that. But the last couple of months we have seen a flattening and a slight tick upwards in certain parts of that. I think we're seeing that bottom forming here in the U.S. relative to that process MRO market, which is key to us making a margin not dropping off as far as you would expect with a sales decline next year. So I mean I think right now I'm pretty encouraged by it, but the last 12 months have been pretty tough, I've not done a very good job of forecasting and I've been humbled quite a bit about that. But right now I feel I can see the signs of it happening and I feel good about it. And I feel very good about what Steve Sonnenberg and John Barron and his teams are doing around the whole process business getting ready for it. And they're reacting extremely fast, which very important relative to the margin stabilization and not declining as much as you think. Walter, anything else you want to add to that? Walter J. Galvin: No, that's very true. David N. Farr: They're reacting extremely, my hats off to them. I mean this is a company who went from growing and immediately starting to take action. Jeff Sprague – Citi: It is amazing going from what, a plus 9 to a minus 14 in a couple of quarters. Walter, could you just give us a little color on how big this comp overlap issue is and maybe any – Walter J. Galvin: About $100 million. Jeff Sprague – Citi: One hundred million, and how about pension, any change of view on that for – Walter J. Galvin: I think the last time I said negative 50 to negative 75 I'm now less than 50. Jeff Sprague – Citi: Less than 50. David N. Farr: Less than 50. The comp issue really, it boils out and what we do here is we keep an overlap year because it helps the retention and we amortize this as we go along and it's one of the things. Walter J. Galvin: It's also impacted by what's referred to as mark-to-market on stock price, and we have no crystal ball as to the stock price, either.

Our next question comes from Gautam Khanna – Cowan & Company. Gautam Khanna – Cowan & Company: Can you give us a little bit of color on what your expectations are for free cash in 2010 given what you're doing with inventories and some of the moving pieces there? David N. Farr: The first half will be good. The issue will be when we start recovering, our balance sheet will start – we'll start adding to our balance sheet, so the key issue for us will be, as I look at free cash flow, I know one of the components is capital spending, capital spending will be down again next year. So this year we're going from $714 million to, let's say $570 million or somewhere around there, $560 million, $550 million, somewhere that range. We will go down towards $500 million next year. So I'd put a placeholder right now around $500 million. I can call capital plus or minus $10 million, but say around $500 million next year. Then what's going to happen to us is, as we go into the second half of the year, our plants on my opinion will start producing again come in the March, April, May time period and our receivable and our payables and our inventory levels will start going up again, which will take some cash off and our balance sheet will start growing. So free cash flow next year will be tougher to reach this year's level and it's going to be a challenge for us. It's a question about how tightly we can manage our inventory as we come out of this recovery, because we are doing a very good job of getting off right now and we know it has to come back on at some level, as we start expanding and growing again. But that will be a good sign because that means my operating earnings are going to be going back up, too. So it's going to be tougher next year. My gut tells me right now free cash flow will be slightly less next year than it is this year. Gautam Khanna – Cowan & Company: Given the emphasis on generating cash right now, how do you think about share repurchase? David N. Farr: At this point in time, given what we acquisition opportunities, we continue to do acquisitions. We had a couple we took in front of the board again this time and we have a couple who are about to close this month or next month. We anticipate to be somewhere between $1 billion to $1.5 billion of acquisitions next year. And I'll expect us to do some share repurchase again next year, but most likely at half the level or less than half the level that we did this year. So this year we did $700 million, I would expect us to be somewhere in the $200 million to $400 million range next year, assuming we do that $1.5 billion acquisition.

Our next question comes from Mike Schneider – Robert. W. Baird. Michael Schneider – Robert W. Baird: It strikes me the fourth quarter guidance is actually pretty impressive on margins. If you look at the low end of even the revenue guidance, it implies that operating margins year-over-year are flat to up even excluding restructuring, which I think is impressive, especially if process continues to decline. I guess A, does than hang together and, B, I guess where are the biggest sequential improvements coming in margins? I presume it must be out of climate and probably industrial automation from this trough? David N. Farr: Yes, Walter will go through the number with you on a macro basis first and I'll give you comment about the business, so go ahead, Walter. Walter J. Galvin: As you look at sales and the ranges we gave you on page 15 looking at the underlying sales growth being still down and rather than trying to hit the ranges, looking at the midpoints and trying to keep it simple, it would look like the underlying sales should be up based upon the midpoint of that about $200 million and a 30% leverage going up would be about $60 million. We also expect to liquidate less inventory. We liquidated over $275 million we will probably liquidate something say $175 million. Liquidating $100 million less doing it sequentially third to fourth quarter, we should pick up about $20 million of additional OP. Normally, because you've been following us a long time, Michael, our third to fourth quarter OP because of holidays and other things vacations in Europe, generally move up about a half a point. That would be about $25 million looking at it sequentially. Also for what we've been spending on the restructuring, cost reductions, price cost issues, others, we should probably pick up about $50 million. So that would be the major drivers. You also, as you look at currency and what has happened and acquisitions, we will probably pick up on that front about $75 million in sales, say 15% in rounding that's $10 million of additional OP. Clearly restructuring, we gave you the number of 280 to 300. You can subtract it and say it's going up between $5 million and $25 million. Take the midpoint say you're down 15, and so that gives you an EBIT number. There are also some minor pluses and minuses. We told you the tax rate at 30, so you can back into the fourth quarter tax rate and then move forward. And you can see we're about at the midpoint of the range that we gave you on EPS guidance. Michael Schneider – Robert W. Baird: Okay. David N. Farr: And to follow-up on your points, the early cycle guys will continue, as I said earlier, will continue their margin improvements. We're going to start seeing appliance and tools we should do okay. Climate technology should do okay. The process guys will still be impacted. Jean-Paul's Industrial Automation will continue to be impacted. And we're feeling better about the network power business in the quarter as these guys are getting their action together. And we have a decent, decent backlog there. The restructuring is helping them. Walter J. Galvin: Yes, there were some guys we're not going to give it to you division by division, but there's a half a dozen divisions where they got the restructuring done earlier. And so we will internally see a very good margin improvement in tools. And some of the tool businesses, some of the industrial automation, and other because they got the reduction in sooner and the OP – David N. Farr: I think fundamentally reviewing with the board today and Walter and I have been spending a lot of time on this and getting ready for the top 30 guys and gals in the company will be here together for the next three days. I feel we are doing to the right things to get back to that 16.5% level of operating profit margin as we come back and get this thing growing again. But we're starting to see some of the benefits of it already. And the reason I don't want to give number targets for improvement to operating profit from restructuring is because the volumes are so much lower. I mean, we've lost the last two or three quarters. We've lost $1 billion a quarter of sales, and that's a lot of volume change going on in these plants here. So I feel very good about where we are at this point in time, Mike, and we're starting to get some of that benefit. So I feel good about that.

Our next question comes from Stephen Tusa, Jr. – JP Morgan. Stephen Tusa, Jr. – JP Morgan: When you're looking at network power, there's been some news around the slow uptake of 3G. Is there any risk there that they slow the rollout there? I'm not totally in tune with what's going on in China telecom. David N. Farr: No, we have not seen any really big change. We changed our China network power business to a lot more data infrastructure. The telecom business is less and less, but still we don't see any slowdown there. We think we will see the slowdown next year. But the infrastructure business will continue to do well. But we think next year, 3G will slowdown. It will be an issue for us as we get into 2010. Stephen Tusa, Jr. – JP Morgan: Then U.S. [resi] compressors were they down about in line with that 16% decline in climate? David N. Farr: Yes. Stephen Tusa, Jr. – JP Morgan: Could you just talk about what you're seeing on the fixed versus replace type of dynamics, and I think you guys would see that a lot more than the OEMs. Could you maybe talk about what's going on? David N. Farr: Yes, we've actually seen the fixed business do very well for us. Our re-man and re-build, that's gone extremely well. So we've seen that perform better than the underlying market as people have decided to just replace their compressor rather than buy the whole system. I think the next thing right now, Steve, as you know this marketplace we've had it very cold and most of the United States, the inventories are at low levels. I think the next thing is, as I said earlier, what's the build ahead that we see the OEMs. And we will have to work on that 410A build ahead because I think you'll see a little bit of that of getting R22 on stock before you can no longer manufacture after 12/31. And I think you'll see a little bit just like we saw in the 13 SEER, 10 SEER thing. Stephen Tusa, Jr. – JP Morgan: Lastly, you talked about the margin dynamics for the fourth quarter. But you said down 200-300 bps of process next year. The decrement was relatively tough this quarter. What does the margin look like in process in the fourth quarter? And maybe you could give us or just a base as far as what that 200 to 300 bps falls off of next year. David N. Fall: I think we're going to finish the year, let me give you a full year. I'm going to give you a range for full year. I'm looking on the sheet right here, wide range. I think we're going to see somewhere – we're looking at a different number. I might have to have Lynne call you back on that because that doesn't make sense to me from the sheet that he has here.

Yes. Steve, let me circle back with you on it.

Okay, then you circle back. I don't want to give a number because that number doesn't look right, what I'm looking at right now.

Our next question comes from the line of Eli Lustgarten - Longbow Securities. Eli Lustgarten - Longbow Securities: Currency is going to go your favor probably next year, and I'm just wondering whether you factored in as you have next year and currency not being a negative and that should probably even be in the neutral is not positive in next year's numbers. David N. Farr: It will be a positive next year. But when I give forecasts, I give underlying sales forecasts out. I don't really, I mean we'll put our stake in the ground in currency when we get into November and when we see where the dollar is. But the odds are extremely high that we'll see the, this year we had a decrement of about $1 billion in sales. Next year we'll have currency helping us. And you're right. And that typically flows through anywhere between the 12%, 13% margin level. It's a low number. But I would expect, Eli, that we will have a positive growth top line from currency next year. Eli Lustgarten - Longbow Securities: The pre-build that may happen in the calendar fourth quarter in your compressor business for your [cumin] change, are you expecting that to be taken away from the first part or at least the second quarter, if not further your second quarter in 2010. Is that correct? David N. Farr: Yes. I wouldn't say so. I think what you're going to see is you're going to see some of our OEMs make the decision to build R-22 units before they can no longer build them at the end of the date is 12/31/09. So I think you're going to see some build, which will cause us to build more R-22 compressors, and that would be pulled into the channel. They'll hold and they'll move it out. Some of they'll hold, and some move it out. And so that would be a little bit of pull from the early part of the second quarter, exactly. Eli Lustgarten - Longbow Securities: One final question, how long do you think it takes for oil to hold over $70 before the MRO business and process begins to start revamping itself, anything's in stabilization? David N. Farr: I think you got to have two to three months of pretty good oil prices 70 plus type of level before you start seeing that, but if it stays up there for two or three months, you're going to see it. David N. Farr: With that, I want to say thanks to everyone for joining us today. I also want to thank everybody again out there from an operational standpoint for everything you're doing to strengthen Emerson for the long-term. There's a lot of very difficult actions being taken across this company at a very quick pace both from restructuring and from an inventory reduction standpoint. To take out $500 million of inventory in a matter of seven, eight months is a lot of work to do, and then on top are the underlying sales being down 12% or 13%, so I want to thank everybody for doing it. And I also want to thank the people for joining us today and appreciate all your support and look forward to seeing you again when we come back out. All the best to you now.

Ladies and gentlemen, this concludes the Emerson third quarter fiscal 2009 conference call. If you would like to listen to a replay of today's conference, please dial 303-590-3030 or 1-800-406-7325 using the access code 4115039 pound. ACT would like to thank you for your participation. You may now disconnect.